Summarise three ways through which a bill of exchange might be discharged
Ways through which a bill of exchange might be discharged
- Payment in due course: if the bill is paid by or on behalf of the acceptor at or after maturity, it is discharged and parties freed.
- Acceptor – holder maturity (merger): If the acceptor of a bill becomes the payee of right, at or after maturity the bill is discharged.
- Renunciation or waiver: Under sector 62 (1) of the Act, if a bill is intentionally cancelled by the payee or his agent, and the cancellation is apparent thereon, the bill is discharged.
- An unintentionally cancellation does not discharge a bill.
- Material alteration: Under section 64 (1) of the .Act, a material alteration on a bill discharges all the parties not privy to the alteration. Under section 64 (2) a material alteration comprises a change in amount payable time of payment, data and place of payment.
- Non-Representation: Under section 45 (1) of the Act, the non-representation of a bill for payment as prescribed by law discharges the drawer and endorsers.